Zepsyre misses in Ovarian, SCLC still promising

PharmaMar 23 January 2018 Update
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PharmaMar

Zepsyre misses in Ovarian, SCLC still promising

Clinical update

Pharma & biotech

23 January 2018

Price

€1.82

Market cap

€404m

$1.22/€

Net debt (€m) at end September 2017

66.4

Shares in issue

222.2m

Free float

80%

Code

PHM

Primary exchange

BME

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(27.0)

(41.3)

(35.7)

Rel (local)

(29.8)

(43.3)

(43.0)

52-week high/low

€4.2

€1.7

Business description

PharmaMar is a Spanish biopharmaceutical company with a core focus on the development of marine-based drugs for cancer. Yondelis is approved in the US, EU and Japan, and is partnered with Janssen (J&J) in the US and Taiho in Japan. The group also has consumer chemicals, molecular diagnostics and RNAi operations.

Next events

Final EMA decision on Aplidin

June/July 2018

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

PharmaMar is a research client of Edison Investment Research Limited

PharmaMar recently announced that Zepsyre® failed to show a progression-free survival (PFS) benefit over Topotecan and pegylated liposomal doxorubicin (PLD) in the 443-patient CORAIL study in platinum-resistant ovarian cancer. Zepsyre is currently in a Phase III trial in small cell lung cancer (SCLC) patients with protocols for pivotal studies in endometrial and breast cancer being finalised.

Year
end

Sales revenue
(€m)

PBT*
(€m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/15

162.0

5.9

3.0

0.0

60.7

N/A

12/16

164.0

(24.7)

(10.8)

0.0

N/A

N/A

12/17e

171.2

(11.1)

(5.0)

0.0

N/A

N/A

12/18e

184.0

20.1

9.0

0.0

20.2

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Phase III CORAIL study missed the primary endpoint

The 443-patient CORAIL study in platinum-resistant ovarian cancer missed the PFS primary endpoint. Details are scarce, although the company acknowledged that PFS for Zepsyre, Topotecan and PLD were the same (indicating that the drug does have single agent activity, just not enough to show a benefit over the standard of care). On a positive note, the company did disclose that Zepsyre demonstrated a better safety profile than the control arm, which is important for its programmes in other cancers.

Zepsyre continues to be promising in SCLC

PharmaMar presented promising Zepsyre data in SCLC patients at the European Society for Medical Oncology (ESMO). Importantly, in Cohort B, which has the same dose as that being used in the Phase III trial, PFS was 5.3 months, which is higher than the 3-4 months typically seen with Topotecan, the current standard of care. The 600-patient Phase III ATLANTIS study in relapsed SCLC patients is ongoing.

More Zepsyre pivotal studies coming

Beyond SCLC, PharmaMar is also about to embark on pivotal studies in endometrial and breast cancer, where protocols are being finalised. The 44% response rate seen in second-line endometrial cancer patients is especially noteworthy as these patients are typically chemo-resistant. We expect the Phase III in endometrial cancer to be initiated in H118.

Valuation: Decreased to €1.35bn or €6.06 per share

We are decreasing our valuation from €1.84bn or €8.28/share to €1.35bn or €6.06/share as we have removed Zepsyre in ovarian cancer from our model. We have also delayed our expected EU launch timeline for Aplidin to 2021 from 2018 and reduced the probability of success to 30% from 90% due to a negative CHMP recommendation in Europe and uncertainty regarding the product’s future.

Zepsyre setback

PharmaMar recently announced that the 443-patient CORAIL study in platinum-resistant ovarian cancer missed the primary endpoint and Zepsyre showed no PFS benefit over Topotecan and PLD, which are the standard of care. Details are scarce as the company expects to present the full results at a scientific conference. However, the company acknowledged that PFS for Zepsyre, Topotecan and PLD were the same (indicating that the drug does have single agent activity, just not enough to show a benefit over the standard of care). This is a bit disappointing following the data from a previous Phase II trial comparing Zepsyre to Topotecan, in which the drug showed a statistically significant PFS benefit in platinum-resistant cancer patients (5.7 months versus 1.7 months, p=0.005) in the randomised-controlled stage of the trial.

So what happened? There were some important changes in the design of the Phase III trial compared to the Phase II, which may have affected the results. First, the comparator arm is different as patients could receive either Topotecan or PLD rather than just Topotecan. Initially, the Phase II trial was supposed to have PLD as a comparator but, due to a worldwide shortage at the time, it was switched to Topotecan. Additionally, in the Phase III, patients who received Topotecan only received the standard, five-day regimen rather than the weekly regimen. In the Phase II, patients could receive both and 21 of the 29 Topotecan patients were on the weekly regimen. In a previous trial comparing the two Topotecan regimens in platinum-resistant ovarian cancer patients, there were trends favouring the five-day regimen in both response rate (15% vs 4%) and PFS (4.3 months vs 3.0 months), although neither difference was significant.1

  Sehouli et al., Topotecan Weekly Versus Conventional 5-Day Schedule in Patients With Platinum-Resistant Ovarian Cancer. Journal of Clinical Oncology 29, no. 2 (January 2011) 242-248.

Another key change is that the company amended the Zepsyre dosing regimen. It was a flat dose of 7mg given every three weeks in the Phase II, but was based on body surface area in the Phase III. At a dose of 3.2mg/m2 and an average body surface area of around 1.7 for women with ovarian cancer,2 the average dose would be approximately 5.4mg, somewhat lower than the 7mg dose used in the Phase II. The main reason for the change was the high level of neutropenia found in the Phase II (85% grade 3/4, 64% grade 4), especially in those with low body surface area. Changes to the control arm likely benefited its performance, while changing the Zepsyre dosing regimen likely negatively affected its efficacy.

  Sacco et al., The Average Body Surface Area of Adult Cancer Patients in the UK. PLoS One. 2010; 5(1): e8933.

Zepsyre in SCLC

Despite the negative trial result in platinum-resistant ovarian cancer, we continue to be optimistic about the drug’s potential in other cancers, especially SCLC. PharmaMar recently presented promising updated data on Zepsyre in SCLC patients at ESMO in Madrid. The new data include Cohort B, which had a body surface area-based dose of Zepsyre (2mg/m2) in combination with 40mg/m2 of doxorubicin (DOX), as well as a single agent arm with Zepsyre at a 3.2mg/m2 body surface area-based dose. In both the new arms, the response rate is much higher than the response rate typically seen with Topotecan (13-24%3). Importantly, in Cohort B, which has the same dose as that being used in the Phase III trial, PFS was 5.3 months, which is higher than the 3-4 months typically seen with Topotecan. The PFS in Cohort B, which featured body surface area-based dosing, was also higher than the PFS seen in Cohort A, which featured fixed dosing for patients.

  Garst et al., Topotecan: An evolving option in the treatment of relapsed small cell lung cancer. Therapeutics and Clinical Risk Management 2007:3(6) 1087-1095.

Exhibit 1: Zepsyre in SCLC

Lurbinectedin + DOX (q3wk)

Lurbinectedin + TAX (q3wk)

Lurbinectedin single agent (q3wk)

Cohort A L 3-5mg FD D1 + DOX 50mg/m2 D1 (n=21)

Cohort B L 2mg/m2 D1 + DOX 40mg/m2 D1 (n=27)

L 2.2mg/m2 D1 + TAX 80mg/m2 D1 & D8 (n=7)

L 3.2mg/m2 D1
(n=36)

Complete response rate (%)

10%

4%

14%

0%

Partial response rate (%)

57%

33%

57%

36%

Objective response rate (%)

67%

37%

71%

36%

Stable disease (%)

14%

33%

0%

39%

Progressive disease (%)

19%

30%

29%

25%

Disease control rate (%)

81%

70%

71%

75%

Duration of response (months)

4.5

5.2

2.3

6.2+

Progression free survival (months) - patients with chemotherapy free interval of >30 days

4.7

5.3

3.9

3.1+

Progression free survival (months) - platinum sensitive patients

5.8

6.2

3.9

4.6+

Source: PharmaMar, ESMO 2017. Note: L = lurbinectedin, DOX = doxorubicin, TAX = paclitaxel.

In August 2016, PharmaMar initiated the ATLANTIS trial, which is a multicentre, open-label, randomised Phase III trial in 600 patients with relapsed (second-line) SCLC following platinum-containing therapy. The primary endpoint is progression free survival (PFS) comparing patients treated with the combination of Zepsyre and doxorubicin to the control arm where patients are treated with either Topotecan or the CAV regimen, a combination of cyclophosphamide, adriamycin (the brand name for doxorubicin) and vincristine. Data from the ATLANTIS trial are expected in 2019.

Promising recent endometrial cancer data

Other than SCLC, Zepsyre has had promising data in endometrial cancer (EC), which were recently presented at the ASCO meeting held in Chicago on 2-6 June 2017. The ASCO data included four cohorts of endometrial cancer patients from three separate studies, who were treated with Zepsyre as a single agent or in combination with chemotherapy drugs.

In Cohort B (which used the regimen that will be used in the upcoming Phase III trial: Zepsyre at 2mg/m2, doxorubicin at 40mg/m2) of the Zepsyre plus doxorubicin Phase Ib trial, there was 44% response rate (8/18) and acceptable toxicity. Only three of the 18 subjects experienced disease progression, so the disease control rate (DCR) was a high 83%.

In Cohort A where patients received a fixed dose of 3-5mg Zepsyre in combination with 50mg/m2 of doxorubicin every three weeks, there was a 28% ORR (4/14), including two patients who had a complete response rate. However, there was also a high incidence of myelosuppression, including febrile neutropenia in 40% of subjects (3/14). In other cohorts, the toxicity was more tolerable, with only 16% of subjects experiencing febrile neutropenia in Cohort B and 3.6% in the Zepsyre-only arm. Patients in the Zepsyre/doxorubicin trials had been treated with up to two lines of prior chemotherapy for advanced disease (median one prior line).

The 44% response rate seen in Cohort B of the Zepsyre/doxorubicin combination trial is a very encouraging outcome for a study in which all of the subjects were undergoing second-line chemo treatment where EC is largely a chemo-resistant disease.4 Also, the platinum-free interval (PFI) in these patients was just 4.3 months, an interval associated with a low rate of response (the average response rate for those with a PFI of less than six months is 25% compared to 65% for patients with a PFI of greater than 24 months5). The 13% single agent response rate was also promising as typical single agent chemotherapy response rates for patients who received platinum therapy previously range from 4-13.5%.6 The 7.7- to 7.8-month PFS seen in the Zepsyre/doxorubicin combination trial was also encouraging as PFS is typically closer to 3.2 months in similar patients.7

  Colombo et al., Endometrial cancer: ESMO Clinical Practice Guidelines for diagnosis, treatment and follow-up. Annals of Oncology (2013) 24 (suppl_6): vi33-vi38.

  Nagao et al., Applicability of the concept of “platinum sensitivity” to recurrent endometrial cancer., Gynecologic Oncology 2013 Dec; 131(3):567-73.

  Fleming et al., Second-Line Therapy for Endometrial Cancer: The Need for Better Options. Journal of Clinical Oncology 33, no. 31 (November 2015) 3535-3540.

  Nagao et al., Applicability of the concept of “platinum sensitivity” to recurrent endometrial cancer., Gynecologic Oncology 2013 Dec; 131(3):567-73.

Exhibit 2: Activity of Zepsyre (lurbinectedin, PM01183) as single agent and in combination in patients with endometrial cancer

L+DOX (q3wk)

L+TAX (q3wk)

L alone (q3wk)

Response (evaluable patients)

Cohort A
L 3-5mg FD D1 + DOX 50mg/m
2 D1 (n=14)

Cohort B
L 2mg/m
2 D1 + DOX 40mg/m2 D1 (n=18)

L 2.2mg/m2 D1 + TAX 80mg/m2 D1 & D8
(n=11)

L 3.2mg/m2 D1
(n=40)

CR

2 (14%)

-

-

1 (3%)

PR

2 (14%)

8 (44%)

3 (27%)

4 (10%)

ORR

4 (28%)

8 (44%)

3 (27%)

5 (12.5%)

SD

8 (57%)

7 (39%)

2 (18%)

15 (38%)

PD

2 (14%)

3 (16%)

6 (55%)

20 (50%)

DCR

9 (85%)

15 (83%)

5 (45%)

20 (50%)

DOR (months)

19.5

6.8

6.1

4.3+

PFS (months)

7.8

7.7

1.9

2.5+

Source: PharmaMar 2017 ASCO abstract 5586. Note: L = lurbinectedin; CR = complete response; D = day; DCR = disease control rate; DOR = duration of response; DOX = doxorubicin; FD = flat dose; ORR = overall response rate; PD = progressive disease; PFS = progression-free survival; PM = PM1183; PR = partial response; q3wk = every three weeks; SD = stable disease; TAX = paclitaxel.

PharmaMar plans to initiate a Phase III study of Zepsyre in EC. While the design has not been finalised, it is expected to have 500 patients who will either receive 2.0mg/m2 of Zepsyre plus 40mg/m2 of doxorubicin or 60mg/m2 of doxorubicin with a primary endpoint of overall survival. The trial is expected to begin in H118.

The company is also planning a registrational trial in 116 BRCA2 mutated, HR-positive, HER2-negative metastatic breast cancer patients, which will be a single arm study in which patients would receive 3.5mg/m2 of Zepsyre. That protocol is currently being finalised.

Valuation

We are decreasing our valuation from €1.84bn or €8.28/share to €1.35bn or €6.06/share as we have removed Zepsyre in ovarian cancer from our model. We have also delayed our expected EU launch timeline for Aplidin to 2021 from 2018 and reduced the probability of success to 30% from 90% due to a negative CHMP recommendation in Europe, which the company is appealing (a final decision is expected in the June/July time frame) as well as uncertainty regarding the future of the product. Otherwise, we are keeping our valuation the same. We have also updated our financial estimates by removing Aplidin sales from 2018. We will make a more complete update of financials and the valuation following the Q417 results report.

Exhibit 3: PharmaMar sum-of-the-parts DCF

Product

rNPV (€m)

rNPV/
share (€)

Assumptions

Chemicals business FCF

131.2

0.59

7.5% WACC, 3% growth rate from 2019 onwards, accounts for 45% of group capex.

Yondelis (Europe)

578.6

2.60

Second-line soft-tissue sarcoma (STS) peak sales of €87m with 40% penetration; third-line ovarian cancer peak sales of €37m with 8% penetration into addressable platinum sensitive market. First potential generics in 2024. 10% WACC.

Yondelis (US)

146.6

0.66

STS (second-line) peak sales of $130m, launched 2016; peak sales in platinum-sensitive ovarian cancer of $50m, 65% risk adjustment, 2020 launch; both assume 15% royalty from J&J.

Yondelis (Japan)

24.1

0.11

STS only: peak sales of €34m; 15% royalty from Taiho. 10% WACC.

Aplidin (multiple myeloma)

52.9

0.24

Global peak sales of $300m assuming 40% of MM patients ultimately receive fourth-line therapy and 25% penetration; pricing of $25k in EU with 25% US premium; 30% success probability in Europe, 30% in the US; launch in 2021 in the US and EU; sold by Chugai in eight European territories (assume effective royalty of 25%) and direct in other EU regions, assume 25% royalty in US; includes €20m regulatory milestones out of €30m total Chugai milestones. No milestones included for other territories at this stage.

Zepsyre (SCLC)

691.8

3.11

Peak sales of €680m; US and EU: 65% success probability, 2020 launch sold direct in Europe and US; Japan: 50% success probability, 2022 launch, 20% royalty.

Zepsyre (breast – BRCA2 mutated)

136.8

0.62

Peak sales of €250m; 45% success probability; US and EU: 2021 launch – sold direct in Europe and US; Japan: 50% success probability, 2023 launch, 20% royalty.

Zepsyre (endometrial cancer)

211.6

0.95

Peak sales of €198m; US and EU: 65% success probability, 2022 launch sold direct in Europe and US; Japan: 50% success probability, 2023 launch, 20% royalty.

Zepsyre upfront and milestones

47.7

0.21

Chugai upfront €30m, plus Chugai Japan development milestones assumed to be €35m of ~€70m total potential Chugai milestone payments (assumed to average €7m/year over 2017-21), risked at 50-90%; no Chugai sales-based milestones or milestones for other territories included in our forecasts at this stage.

Sylentis

7.0

0.03

Cumulative peak sales of $200m, with 20% probability of success, potential launch 2021, 10% royalty.

Genomica

57.7

0.26

Conservative 2% growth rate.

R&D

(354.2)

(1.59)

12.5% WACC.

SG&A

(302.2)

(1.36)

10% WACC.

Capex

(17.6)

(0.08)

55% of group capex for biopharma business.

Net cash/(debt)

(66.4)

(0.30)

At Q317

Total

1,346

6.06

Source: Edison Investment Research. Note: WACC of 12.5% used except where indicated otherwise.

Exhibit 4: Financial summary

€'000s

2015

2016

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

161,992

164,035

171,235

184,043

Cost of Sales

(45,705)

(43,971)

(47,461)

(49,518)

Gross Profit

116,287

120,064

123,774

134,526

R&D Expenses (gross)

(63,549)

(79,780)

(76,797)

(78,615)

Capitalised in-house R&D

3,258

1,357

1,753

1,800

Sales, General and Administrative Expenses

(74,067)

(71,550)

(64,346)

(60,320)

Other (milestones and royalties)

31,825

16,913

22,563

41,210

EBITDA

 

 

17,578

(11,463)

924

32,517

Operating Profit (before amort. and except.)

11,297

(18,706)

(6,536)

24,833

Depreciation & Amortisation

(6,281)

(7,243)

(7,460)

(7,684)

Exceptionals

0

0

0

0

Operating Profit

11,297

(18,706)

(6,536)

24,833

Net Interest

(5,388)

(5,993)

(4,576)

(4,734)

Other

0

0

0

0

Profit Before Tax (norm)

 

 

5,909

(24,699)

(11,112)

20,099

Profit Before Tax (as reported)

 

 

5,909

(24,699)

(11,112)

20,099

Tax

654

592

0

0

Deferred tax

0

0

0

0

Profit After Tax (norm)

6,563

(24,107)

(11,112)

20,099

Profit After Tax (FRS 3)

6,563

(24,107)

(11,112)

20,099

Minority interests

25

25

0

0

Discontinued operations

0

0

(48)

0

Net income (normalised)

 

 

6,588

(24,082)

(11,112)

20,099

Net income (FRS3)

 

 

6,588

(24,082)

(11,160)

20,099

Average Number of Shares Outstanding (m)

222.2

222.2

222.2

222.2

EPS - normalised (c)

 

 

3.0

(10.8)

(5.0)

9.0

EPS - FRS 3 (c)

 

 

0.03

(10.8)

(5.0)

9.0

Dividend per share (c)

0.00

0.00

0.00

0.00

Gross Margin (%)

71.8%

73.2%

72.3%

73.1%

EBITDA Margin (%)

10.9%

-7.0%

0.5%

17.7%

Operating Margin (before GW and except.) (%)

7.0%

-11.4%

-3.8%

13.5%

BALANCE SHEET

Fixed Assets

 

 

99,804

100,145

98,411

96,024

Intangible Assets

29,377

27,448

25,691

27,491

Tangible Assets

30,624

31,141

30,978

26,791

Other

39,803

41,556

41,742

41,742

Current Assets

 

 

112,135

120,992

108,114

115,240

Stocks

22,990

22,158

23,144

27,133

Debtors

40,200

62,652

44,259

42,859

Cash and current financial assets

45,625

32,367

35,357

39,894

Other

3,320

3,815

5,354

5,354

Current Liabilities

 

 

(70,623)

(87,164)

(84,697)

(79,883)

Creditors

(41,994)

(59,258)

(57,444)

(52,630)

Short term borrowings

(28,629)

(27,906)

(27,253)

(27,253)

Long Term Liabilities

 

 

(68,280)

(85,478)

(82,783)

(72,493)

Long term borrowings

(64,973)

(67,583)

(71,678)

(71,678)

Other long term liabilities

(3,307)

(17,895)

(11,105)

(815)

Net Assets

 

 

73,036

48,495

39,045

58,887

CASH FLOW

Operating Cash Flow

 

 

10,195

(3,040)

11,562

14,568

Net Interest

252

(5,000)

(4,576)

(4,734)

Tax

654

(374)

0

0

Capex

(9,221)

(6,093)

(6,193)

(5,297)

Acquisitions/disposals

0

129

0

0

Financing

6,169

(632)

(979)

0

Other

0

0

0

0

Net Cash Flow

8,049

(15,010)

(187)

4,537

Opening net debt/(cash)

 

 

54,886

46,910

61,984

62,550

Exchange rate movements

0

0

0

0

Other

(73)

-64

-379

0

Closing net debt/(cash)

 

 

46,910

61,984

62,550

58,013

Source: PharmaMar accounts, Edison Investment Research

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Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by PharmaMar and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by PharmaMar and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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